Court File and Parties
Court File No.: CV-19-0031-00 Date: 2019 April 16 Ontario Superior Court of Justice
Between: ROBERT HORNE HALLIDAY, Plaintiff – and – MIKE BROMLEY, THE WOLFE ISLAND TRUST INC. and SLATE SIGNS FROM ABOVE INC., Defendants
Counsel: G. Edward Lloyd, for the Plaintiff John Ryder-Burbidge, for the Defendants
Heard at Kingston: March 7, 2019
Before: MacLeod-Beliveau J.
Reasons for Decision (Contested Motion for a Certificate of Pending Litigation)
Reasons for Decision
1The plaintiff, Robert Horne Halliday, (hereinafter “Halliday”), brings this contested motion for a certificate of pending litigation in respect of eleven lots, located on Wolfe Island and their associated road and rights of way, (hereinafter “the disputed properties”) owned by the defendants Mike Bromley and The Wolfe Island Trust Inc., being controlled by Mike Bromley (hereinafter collectively referred to as “Bromley” unless otherwise specifically named), on the basis that Halliday has an interest in land in the disputed properties, namely, that the said lands are held by Bromley in trust for Halliday.
2Bromley has put the disputed properties up for sale without Halliday’s consent with the intention of keeping the proceeds of sale and without honouring the obligations to Halliday as the trustees of Halliday’s property.
3The motion was originally brought by Halliday without notice to Bromley before Toscano Roccamo, J. on January 24, 2019. She held that the limited record before her failed to make full and frank disclosure and that it was difficult to tell who the aggrieved party was. She held that full and frank disclosure may not be possible in this case without the defendants’ appearance and evidence. She ordered that Halliday serve his statement of claim and a copy of the motion record together with a copy of her endorsement, and adjourned the motion to February 7, 2019.
4On February 7, 2019, the motion was further adjourned to February 21, 2019 by Hurley, J. on consent of the parties to enable the defendants to obtain counsel, on the further basis that the defendants were not to deal with the disputed properties, including not to sell, transfer or encumber the disputed properties in any way, pending the court’s determination of the motion for a certificate of pending litigation on the merits. On February 21, 2019, Abrams, J. adjourned the motion to March 7, 2019 with the endorsement of Hurley, J. to continue. This restriction on the defendants continues to be in place pending release of my decision and any terms imposed by me in this decision including any order made by me in respect of the disputed properties. The defendants filed their responding affidavit on February 20, 2019.
The Issue
The Issue
5Has Halliday established that there is a triable issue of a reasonable claim to an interest in land sufficient to warrant the issuing of a certificate of pending litigation in relation to the disputed properties?
Result
Result
6A certificate of pending litigation shall issue as sought by Halliday in respect of the disputed properties. Halliday has established that he has a triable issue in respect of a reasonable claim to an interest in land in the disputed properties.
Position of the Parties
Position of the Parties
7The position of Halliday is that he is the rightful owner of the disputed properties. The position of Halliday is that he transferred the disputed properties to Bromley to hold in a secret and silent express trust for him. Halliday’s alternate position is that the funds used to purchase the disputed properties were all from Halliday and that he is in fact the beneficial owner of the disputed properties registered to Bromley and to the Wolfe Island Trust Inc. by way of a constructive, resulting or implied trust. Halliday’s position is that Bromley agreed to transfer the disputed properties back to him when Halliday asked Bromley to do so, and that Halliday relied upon Bromley’s assurances that Bromley would transfer the disputed properties back to Halliday when he asked Bromley to do so.
8The position of Halliday is further that he has established an interest in land in the disputed properties. Halliday’s position is that he gave Bromley $55,000.00 in cash to finance the so-called “purchase” of the disputed properties from himself, and that he provided a further $25,000.00 to cover the realty taxes and other expenses for holding the disputed properties in trust. The primary reason for Bromley holding the disputed properties in trust for Halliday, according to Halliday, was to protect Halliday from a fraudster, former lawyer, Mr. Calin A. Lawrynowicz, who was suing Halliday on what Halliday states are fabricated grounds. Halliday had previous financial dealings with Bromley at the time of Halliday’s divorce. Halliday had loaned Bromley $300,000.00 on a handshake to help Bromley when he was going through a divorce, which sum Bromley paid back to Halliday with interest. Halliday trusted Bromley’s word that he would return the title to the disputed properties when Halliday asked him to do so, which now Halliday states was a foolish mistake on his part.
9The position of Bromley is that Halliday is just making all his claims up and that Halliday’s claims are concocted. The position of Bromley is that Halliday has not established any evidence of a trust of any kind in respect of the disputed properties at the material time when the properties were transferred in October of 2013, and that there is no evidence of any other interest Halliday has in the disputed properties, written or otherwise. It is further Bromley’s position that Halliday cannot establish compliance with sections 1 (1), 4, 9 and 10 of the Statute of Frauds. Bromley denies the existence of any trust or other interest in land of Halliday in the disputed properties. Bromley’s position is that there is no unjust enrichment and no constructive, resulting or implied trust. Bromley’s position is that at best, Halliday has a claim for a debt for any monies proven to be advanced to Bromley, but that a claim for a debt is not an interest in land sufficient to support the issuance of a certificate of pending litigation.
10The position of Bromley is further that Halliday never advanced the sums of $55,000.00 and $25,000.00 as claimed, and that Halliday lacked the financial resources in 2013 to lend or advance these sums to Bromley, which is denied by Halliday. Bromley’s position is that he purchased the disputed properties entirely from his own resources pursuant to written, standard, conventional real estate agreements of purchase and sale, where both he and Halliday were represented by their respective real estate agents and lawyers, and that Bromley bought the disputed properties at arm’s length as evidenced by the multiple sign backs of the offers between the parties. Bromley’s position is that Halliday had nothing to do with the financing of the transfer of the disputed properties, and that there is no written record of any trust as between the parties, and that Bromley is the legal owner of the disputed properties.
11Halliday acknowledges that real estate agents and lawyers were used in relation to the disputed property transactions, but that this was done to give effect to the oral agreement that the disputed lands were held by Bromley in trust for Halliday, and to give the transactions the appearance of being believable and realistic. According to Halliday, all of this was Bromley’s idea. Halliday now regrets resorting to such subterfuge, but at the time Halliday thought it was the best thing to do.
Background
Background
12The background facts begin simply enough with an inheritance, but soon become complicated and convoluted. In 1970, Halliday and his brother inherited approximately 150 to 175 acres of land on Holliday Point on Wolfe Island. Halliday and his brother divided the land between them. Halliday severed his share into approximately 45 lots which includes the disputed properties. The disputed properties were legally and beneficially owned by either Halliday in his own name as the sole owner or by Halliday’s corporation, Holliday Point Development Corporation, being 845101 Ontario Ltd. (hereinafter “845101”), of which Halliday was the legal and beneficial owner. The ownership as between Halliday and 845101 was alternated, or “checker-boarded” as the expression goes, to prevent the legal title to the lots merging pursuant to The Planning Act, and to maintain their severances.
13The disputed properties are all vacant land in the process of being developed as residential lots. The disputed lands are legally described as: Part lot 2, Concession South of Baseline Wolfe Island, namely Lots 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 and 12 of Reference Plan 13R-11795 together with FR 624004 and FR 755834, Frontenac Islands, together with the associated road and rights of way. Lot 1 is a strip of land with a right of way or the access road to the disputed properties and remains owned by Halliday through his corporation 845101. Lot 1 is subject to an agreement of purchase and sale with the third defendant, Slate Signs From Above Inc., dated November 12, 2012 which did not close.
14Halliday and Bromley formerly were good friends. Both Halliday and Bromley are experienced in real estate matters and experienced in business. On October 1, 2013, Halliday transferred five lots of the disputed properties, namely Lots 3, 5, 7, 9, and 11, to Mike Bromley for a combined total price of $25,000.00 and six more lots of the disputed properties, namely Lots 2, 4, 6, 8, 10 and 12, to The Wolfe Island Trust Inc. of which Bromley was the principal legal and beneficial owner, for a combined total price of $30,000.00. The ownership as between Mike Bromley and The Wolfe Island Trust Inc. followed the same alternating, checker-board pattern to maintain the lot severances. All of the lots were transferred pursuant to written standard form agreements of purchase and sale. On October 4, 2013, the five lots to Mike Bromley were registered as Instrument #FC168566 and the six lots to The Wolfe Island Trust Inc. were registered as Instrument # FC168576.
15According to Halliday, he gave Bromley $55,000.00 in cash so that Bromley could “buy” the disputed properties from Halliday. According to Halliday, he then gave Bromley an additional $25,000.00 to be put into a separate account so that Bromley had funds to pay the realty taxes and other liabilities in relation to the properties.
16By August of 2016, Halliday and Bromley no longer saw themselves as friends. There were several e-mails with references made to the disputed properties. The e-mails exchanged between them were increasingly fractious. On August 7, 2018, Bromley put the disputed properties up for sale. Halliday became aware of this fact in the fall of 2018. Halliday retained counsel to ascertain that the sales were on Halliday’s behalf. After several e-mail communications between Bromley and Halliday’s counsel, it became clear by October of 2018 that Bromley refused to acknowledge that Halliday had any beneficial ownership in the disputed properties or that Halliday was the true beneficial owner of the disputed properties. It became clear that Bromley intended to sell the disputed properties and keep the monies realized for himself.
Analysis
Analysis
17Halliday’s statement of claim properly includes a claim for a certificate of pending litigation in relation to the disputed properties as is required by Rule 42.01(2) of the Rules of Civil Procedure.
18This motion was argued with actual notice to the defendants. In those circumstances, the test in granting a certificate of pending litigation under section 103(1) of the Courts of Justice Act is the same as if the motion were to discharge the certificate under section 103(6) of the Courts of Justice Act. (See Access Storage Inc. v. 1321645 Ontario Ltd. et al, 2017 ONSC 6037)
19The test has been repeatedly held to be whether there is sufficient evidence to establish a reasonable claim to an interest in land based upon the facts, and on which the plaintiff could succeed at trial. The role of the motions judge is limited to determining whether there is a triable issue in respect of whether the party registering the certificate has a reasonable claim to an interest in land, but not to determine whether the party has or has not a reasonable claim to an interest in land which is what the litigation will determine. The role of the judge is analogous to the role of a judge on a motion for summary judgment who determines whether or not there is a genuine issue for trial, but not to decide the issues in the pending action. (See G.P.I. Greenfield Pioneer Inc. v. Moore, [2002] O.J. No.282 Ont. C.A. at paras 18-20)
20I find that the evidentiary record before me establishes that there is a triable issue in respect of whether or not Halliday has an interest in the disputed properties. Halliday’s affidavit is clear about his advancement of the $55,000.00 and the $25,000.00 to Bromley. Halliday’s affidavit is clear about the stated purpose of the advancement of the funds to Bromley, namely to purchase the disputed properties back from Halliday.
21There is a significant amount of money involved. Halliday had the disputed properties appraised in May of 2012, and the lots were valued at $60,000.00 each, for a total value for all eleven lots of $660,000. The lots would likely be worth more in 2019 than in 2012.
22The evidence of Halliday is supported by the affidavit evidence of Christopher Macauley as to the cash nature of the transaction and confirming the sums of $55,000.00 and $25,000.00, and that the denomination of the bills used was a series of $100.00 bills. Mr. Macauley’s evidence is that he was aware that Bromley and Halliday were formerly good friends and that Halliday had lent Bromley $300,000.00 which was repaid to Halliday in cash. Mr. Macauley was aware of the deal between Halliday and Bromley for the disputed property and Bromley holding the disputed property in trust for Halliday and that Halliday thought he could trust Bromley because of their previous financial dealings over Bromley’s divorce loan. Mr. Macauley’s evidence is that Halliday provided Bromley with the cash for the transaction. A few days or a week before they did the deal, Mr. Macauley saw Halliday give Bromley $55,000.00 in cash in one envelope, and $25,000.00 cash in another envelope at his house and that he saw Halliday count out all the money on his pool table in $100 bills. Mr. Macauley’s evidence is that Halliday wanted a witness to the cash transactions in case there were ever any problems in the future which was why Halliday decided to do the cash advance to Bromley at Macauley’s house. Halliday had forgotten this fact until Macauley reminded him.
23Halliday’s former solicitor, Mr. Jehuda Kaminer, who acted on the transfers to Bromley, is said to be aware of the trust arrangement between Halliday and Bromley in relation to the disputed properties, but he has to obtain his file which is in the control of the Law Society of Ontario. Mr. Murray Stroud acted for Bromley.
24Halliday’s affidavit contains a significant number of important e-mails from Bromley to Halliday and/or his counsel. The interpretation of those e-mails argued and urged by Bromley that Bromley owns the disputed properties is not, on its face, clearly compatible with what the plain meaning of the words contained in those e-mails actually say, or the common sense interpretation of those e-mails. Some of the e-mails do appear to acknowledge, I find, that Bromley does hold the disputed properties in a form of trust for Halliday.
25By way of example, the e-mail of August 3, 2016 from Bromley to Halliday says in part,
How bout I just sign these lots over to you and you take care of the taxes, the maintenance, the farm forms, and all the issues you have about the condition of the roads, the names of the streets, and anything else that bothers you.
I hope you can sell these lots and put losing property behind you.
26These words are not compatible with Bromley’s position on this motion, that he is the legal owner of the disputed properties. Some of the e-mails refer to the account at the “Kawartha”, which is the Kawartha Credit Union that Halliday says was the account set up to pay the expenses of the disputed properties. There is evidence of $100 bills being deposited into the Kawartha bank account. The e-mails and the bank records can support a finding, together with other evidence found by a trial judge to be credible, that Bromley does in fact hold the disputed properties in trust for Halliday as Halliday alleges.
27There are other evidentiary issues to be determined in this case such as the effect of the standard form statutory declaration of Halliday given on the closing of the transaction that Halliday he has no claim to the titled lands, a thorough analysis of the banking records and their implication, and the credibility of the parties respective evidence.
28Section 10 of the Statute of Frauds does provide for exceptions to the general rule that declarations and creation of trusts must be in writing in relation to lands or tenements. The exceptions apply to trusts that are created by implication or construction of law. Specific words are not required to create a trust. It must be established that the transferee, in this case Bromley, knew at the time of the transfers in October of 2013 that he held the property for Halliday. The evidentiary record is very contradictory as to what took place, by whom and when they took place as between Halliday and Bromley. While who is telling the truth is a significant triable issue on its own, it is not the basis for the issuance of a certificate of pending litigation. I find, however, that nonetheless there has been a sufficient evidentiary basis established by Halliday of Bromley holding the disputed properties in trust for Halliday, with sufficient evidence at or around the time the transfers were made, to support the relief sought on this motion.
29I am satisfied that on the evidentiary record before me that Halliday has met the test for the relief he seeks on this motion for a certificate of pending litigation. The bank records, the evidence of Mr. Macauley at the time of the transfers, the numerous e-mails between Bromley and Halliday that are in the record before the court, together with the inference that can be drawn from the acknowledgment of the alleged trust in the e-mails from Bromley in his own words, I find, when looked at as a whole, satisfy the test for an order for a certificate of pending litigation to issue.
30I find that Halliday has established on the balance of probabilities that there is a triable issue of a reasonable claim to an interest in land, sufficient to warrant the issuing of a certificate of pending litigation in relation to the disputed properties.
Conclusion
Conclusion
31An order shall issue that a certificate of pending litigation shall issue in relation to the disputed properties, namely:
Part lot 2, Concession South of Baseline Wolfe Island, namely Lots 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 and 12 of Reference Plan 13R-11795 together with FR 624004 and FR 755834, Frontenac Islands, together with any associated road and rights of way.
32The order shall be forthwith taken out by plaintiff’s counsel. Approval of the order by defendant’s counsel is dispensed with. The defendants remain bound by the original terms of the court that they shall not deal with the disputed properties in any way, including not to sell, transfer or encumber the disputed properties in any way, pending the courts determination of the motion for a certificate of pending litigation on the merits, which I order includes up to the time the certificate of pending litigation as now ordered is fully registered on title in respect of the disputed properties. After issuance of the order, plaintiff’s counsel shall provide a copy of the order by mail to defendants’ counsel.
Costs
Costs
33Counsel have agreed that I shall determine the issue of costs based on their cost outlines that were filed and sealed by the court clerk at the conclusion of the argument of the motion, once my decision on the motion had been made.
34This procedure was agreed upon in large part to accommodate defendants’ counsel, Mr. Ryder-Burbidge, who came out of his short-lived retirement to argue this motion, and to not require him to come out of his retirement again to deal with the issue of costs.
35The parties’ respective costs outlines provide the total fees and disbursements inclusive of HST. The plaintiff’s total fees and disbursements inclusive of HST are $12,046.28. On a partial indemnity basis, the plaintiff’s total is $7,790.70. The defendants’ total fees and disbursements inclusive of HST are $9,026.44. On a partial indemnity basis, the defendants’ total is $7,600.38.
36An award of costs is discretionary and should be proportionate to the sums claimed and the results achieved. Generally, costs follow the event and are awarded to the successful party. I find the rates claimed by counsel, the hours claimed and the disbursements incurred to be all reasonable. I have considered the general principles and the factors for the exercise of my discretion in making an award of costs as set out in Rule 57.01 of the Rules of Civil Procedure in making an award of costs. The issues involved were of high importance to the parties. Both counsel are very experienced. There are significant, complicated matters at issue with a substantial sum of money involved.
37I find that the plaintiff is entitled to costs on a partial indemnity basis fixed in the amount of $7,790.70 payable by the defendants to G. Edward Lloyd in Trust for Robert Horne Halliday, on or before May 31, 2019.
38The court wishes Mr. Ryder-Burbidge a happy, healthy and long retirement after a successful litigation career.
Honourable Madam Justice Helen MacLeod-Beliveau
Released: April 16, 2019